More representatives sign on to ATM Fee Disclosure bill

Michael Bridges

05/31/2012 04:20 pm

Credit unions around the country have been urging members of Congress to support
H.R. 4367, the Electronic Funds Transfer Act, sponsored by Reps. Blaine Luetkemeyer (R-MO) and David Scott (D-GA). This legislation provides a common-sense, and much needed update, to the Electronic Funds Transfer Act that will protect ATM owners and operators, such as credit unions, from frivolous lawsuits while continuing to afford consumers the protections and rights they currently enjoy. The legislation added two Florida co-sponsors in the last two weeks.

Under Regulation E, that enforces the Electronic Funds Transfer Act, ATM operators must provide users with two separate notices that a fee will be charged for use of the machine, a physical sign as well as an on-screen notice before the transaction is complete. The dual notice requirement, under current regulations, has led to abuse that harms ATM owners and ultimately drives up the price of services for consumers. The penalty under Reg. E is so high that it has led to a “bounty” and consequently what can best be described as “bounty hunters.” A successful class action lawsuit for violation of the dual notice requirement can be as high as $500,000 or one percent of the owner’s net worth plus attorneys’ fees and costs. In recent years, the physical signs on the outside of the ATM are either being removed, or destroyed, photos taken of the machine, and lawsuits for non-compliance against the owner of the machine are being filed. Even though the plaintiff affirmatively agreed to the charge, they use this dual notice requirement technicality to file the suit. The fact that the plaintiff agreed to the fee is not available as an affirmative defense to the defendant credit union or other ATM operator.

Under
H.R. 4367, the on-screen fee notice and option to cancel the transaction without cost will remain. This gives the person using the ATM the notice required under the EFTA and Reg. E, and thus fully protects consumer rights as envisioned under the Act and regulations. Only the physical sign requirement is removed from the Act and the regulations. This bill results in the full existing protection for consumers, without subjecting ATM owners and operators, such as credit unions, to these frivolous, costly, and invented lawsuits.

Currently, H.R. 4367 has 66 cosponsors, five of which are from the Florida delegation. Reps. Mario Diaz-Balart (R-FL), Bill Posey (R-FL), Ander Crenshaw (R-FL), Daniel Webster (R-FL), Dennis Ross (R-FL) and Tom Rooney (R-FL) have signed on to support this bill.